Ludwig v. Yad Realty

On appeal from Superior Court of New Jersey, Law Division, Essex County, Docket No. L-9205-05.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued January 21, 2010

Before Judges Payne and Waugh.

On January 24, 2005, plaintiff Jeffrey Ludwig was injured in a slip and fall accident occurring at commercial premises owned by defendant YAD Realty, LLC located at 5 Lawrence Street, Bloomfield, New Jersey. A complaint was filed on Ludwig's behalf by attorney Neil A. Malvone, a member of the firm of Lombardi & Lombardi, on November 16, 2005, alleging in the first count that the accident occurred in an interior stairwell of Building 8 between the fourth and fifth floors and alleging in the second count that the accident occurred on a driveway. Service was attempted by certified and regular mail on or about December 15, 2005. No answer was filed, and on June 10, 2006, the complaint was dismissed without prejudice for lack of prosecution. Despite the fact that the complaint had been dismissed, four months later, on October 12, 2006, Malvone filed a motion to enter default. On November 9, 2006, the motion, which was opposed, was denied by Judge Winard. His order bore the following handwritten notation: "Ordered that an Answer be filed no later than 20 days after receipt of the Complaint." No further action occurred.

In September 2008, Lombardi & Lombardi became aware of an act of legal malpractice committed by Malvone. The discovery of additional acts of malpractice led, in January 2009, to an audit of matters that Malvone was handling and to Malvone's termination in February 2009. The present matter was among those mishandled by Malvone.

By motion dated March 19, 2009, the firm of Lombardi & Lombardi sought to vacate the dismissal entered in this matter two and one-half years earlier. In response, a cross-motion was filed by YAD seeking dismissal of the complaint with prejudice. In support of the cross-motion YAD submitted the certification of its manager, Neil Dolgin, who stated that the property in question was the sole New Jersey property owned by YAD and that it had been sold to a Connecticut company later in 2005. Dolgin stated that, following the sale, YAD terminated the services of the property manager, Robert Harrison, and had maintained no further contact with him. Dolgin stated further that YAD had not received notice of Ludwig's accident, and that it would be seriously prejudiced in defending against his action, if restored, "where it had no reason or basis to attempt to preserve any evidence from that time, sold its property, had had no further possession or control over same, and had long lost touch with its former property manager."

The motions were argued before Judge Codey, who denied reinstatement and dismissed Ludwig's action with prejudice, stating in his order:

Service was never effectuated on the defendant. The statute of limitation regarding this 1/24/05 accident and 2005 complaint has long since expired. There is no excusable neglect in the handling of this case under the present set of circumstances that would warrant the restoration of this case that was dismissed for lack of prosecution on 6-10-06.

Ludwig has appealed, arguing that Judge Codey erred in his ruling, and that the dismissal without prejudice should have been vacated pursuant to Rules 4:50-1(f) and 1:13-7. Finding no abuse of discretion in the judge's ruling, Ghandi v. Cespedes, 390 N.J. Super. 193, 197 (App. Div. 2007), we affirm.

Relief under Rule 4:50-1(f) "is available only when truly exceptional circumstances are present and only when the court is presented with a reason not included among any of the reasons subject to the one year limitation." Baumann v. Marinaro, 95 N.J. 380, 395 (1984). The "exceptional circumstances" present in this case arise from Malvone's neglect of the file - conduct giving rise to a claim for relief from judgment pursuant to Rule 4:50-1(a), a provision subject to the one-year limitation. See R. 4:50-2. Nor does Malvone's gross neglect make this a case to which subsection (f) is applicable, Baumann, supra, 95 N.J. at 398, particularly in light of the availability of a legal malpractice action as a remedy for attorney error.

We likewise find no abuse of discretion on Judge Codey's part in failing to restore Ludwig's action pursuant to Rule 1:13-7, given the clear evidence of prejudice offered by YAD. See Rivera v. Atlantic Coast Rehab. Ctr., 321 N.J. Super. 340, 347 (App. Div. 1999) (holding that the vacation of a dismissal pursuant to Rule 1:13-7 should be treated like a motion for dismissal for untimely service of process by considering evidence of prejudice to the defendant as the result of the delay).

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